Uncertainty Surrounds Dollar's Short-Term Outlook, New Data Monitored

2024-08-07 03:01:41

(MENAFN- Investor Ideas) The dollar is continuing its recovery, extending gains from the previous session as traders reduce their expectations of an emergency rate cut by the Federal Reserve. This shift follows Monday's sell-off, during which market expectations for US interest rate cuts increased due to recession fears sparked by weak US job data released last Friday. Concurrently, US Treasury yields have increased, with the demand for US bonds as a safe haven decreasing and risk-on sentiment returning to a certain extent. As the mood improves, the dollar could continue to recover in the short term.

Looking ahead to Thursday, US jobless claims are expected to fall to 240,000 in the upcoming report, which could provide additional near-term support for the dollar if the claims decrease as anticipated. The previous report showed claims rising by 14,000 to 249,000 for the week ending July 27th, approaching a yearly high and exceeding the expected 236,000. Otherwise yields and the dollar could see more pressure.

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